1. What is the link between audit risk and the assertions? 2. Distinguish between the risk of material misstatement at financial statement level and at assertion level. Illustrate with an example. 3. How does the auditor respond to a high level of risk at financial statement level? 4. How would your assessment of risk differ for the following situations 4.1 management is assessed as lacking competence. 4.2 management is assessed as competent but lacking integrity. 5. An immaterial account balance cannot attract audit risk. True or false? Justify. 6. The assessment of the risk of material misstatement at assertion level will affect the audit plan but not the audit strategy. True or false? Justify. 7. Property, plant and equipment is often mistakenly regarded as being "low risk" from an auditing perspective. The truth is that there are numerous situations/factors which could result in the risk of material misstatement related to property, plant and equipment account headings being assessed as high. 125 List at least three situations/factors which could result in the risk of misstatement attached to each of the assertions relating to property, plant and equipment being high. Do not use the same situation/factor for more than one assertion. (Note, you are not required to consider the assertions applicable to Presentation and Disclosure)